Chinese Stock Market Bubble Of Empirical Research

As the rapid development of our country's stock market, it plays the more and more important role in the capital market. The stable and healthy development of stock market influences the capital market even the national economy significantly. The importance is self-evident. However, refer to the existence of bubbles,the degree of the bubbles and whether intervene the bubbles or not, the controversy never cease. Therefore, it is important to further the study about the stock market bubbles for both investor and the government.This paper studies the bubbles in China' s stock market form both the theoretical and empirical perspectives, and analyzes the definition of the stock market bubble,the formation of it . Besides this, we also take several ways to measure the degree of the bubble in China's stock market arid bring forward the countermeasures when they do occur.This paper starts the research with bubble definition. Based on the different definitions of the asset price bubbles, we can conclude the common characters of bubbles. After that, the stock price bubbles definition is put forward on the basis of its characters. In the meanwhile, the bubbles are sorted to further the study.And then, the paper studies the mechanism of the stock market's bubbles. Generally speaking, we study the bubbles always from either rational bubbles or irrational bubbles perspectives. Each has his strong point. At present, always just one way may be used in most of the studies. Nevertheless, this paper makes a comprehensive analysis in China's stock market bubbles combining with both approaches.After that, using the date of our country's stock market from 1994 up to the present, the empirical tests have been done with various measurements. In the mean time, the O-F model I have perfected is used in this paper will be more effective. The evident results indicate that irrational bubbles exist in our country's stock market during the most of sample period. The potential risk is cumulated gradually. That is, the price soaring and slump also verify the unsteady development in stock market.Finally, in order to control stock market bubbles, some proposals or suggestions are put forward on the basis of the previous theoretical analysis. In my opinion, as far as the macro-policy, monetary policy and fiscal policy can control the bubbles effectively in short term. And besides that, we should not only put emphasis upon the quality of enterprises, but also pay more attention to strengthening the information disclosure,restricting the market actions,establishing the shorting mechanism and so on. Only in this way, we can solve the problems about the irrational bubbles of stock market, and keep the capital market healthy.